Business Planning and Market Research

Who? Jane Nolan MBE Entrepreneur in Residence, Newcastle University Careers Service MD Venture Coaching and Consulting Ltd First Year PhD

MARKETS approach M – markets – need to understand and objectively analyse the needs of the marketplace, its size and dynamics. What are the unmet needs, USPs, benefits? A- approach – how will you commercialise the idea? What will people pay? What would the business model be?

Markets Approach R – returns – the rewards and risks in the business and how the shareholders and managers will be rewarded for their efforts K – knowledge – what is the uniqueness of the business? Can it be protected in some way through patents, copyrights and trademarks

MARKETS approach E – ethics – are the ethics of the team and the business or industry aligned T – team – skills, resources, capabilities, shared values and vision, capable of functioning well? S – sustainability – long term sustainability in order to compete effectively

6 Business Plan: Format per Finance Tree Idea What is it? Applications explored Key Markets Users/ Benefits Environment / competition Strategy What is your goal By When? What type of business are you? How do you make money (sales) ? Revenue model Delivery / production Team and systems Risks / risks managed Finance Cash flow forecast (cumulative) Breakeven Investment needed Investment return 1.Exec Summary 2.Business Model 3.Mission 4.Ownership 5.Governance 6.Management 7.Risks 8.Key Personnel 9.Resources 10.Quality Assurance 11.Marketing 12.Products 13.Financial Model 14.Investment Offering

7 Need to Consider Proposition People Potential Path to market Proven Is there a significant enough market? Is it scaleable? Do you have innovative, defensible products? Do you have a strong management team? How much Funding needed? - enough to grow Financial return Forecasts and exit

Market research Helps you decide whether setting the business up is a good idea Helps you understand the market better – find your niche, identify opportunities Helps you segment your market and understand your customers and needs – Improves chances of success Target effectively, meet needs better

Market research Market as a whole Customers Competitors Collaborators? Primary sources – from customers Secondary sources – market reports and studies

Know yourself and your niche Guy Kawasaki - Founder and Managing Director of Garage Technology Ventures o.html?mid=1176

Who is your Customer? -Segmentation -Socioeconomic factors – profession, income, age, gender, location -Character – lifestyle, personality, trendsetter/follower -Behaviour – usage, convenience, frequency of use

Who is your customer? Business Markets- segmentation Company size- SME, large Industry type – Pharmaceutical, NHS,IT, education, media, local government Location – local, national, international

Competitor Analysis who they are what they offer how they price their products what the profile and numbers of their customers are compared with yours what their competitive advantages and disadvantages are compared with yours what their reaction to your entry into the market or any product or price changes might be Source: Business Link

Competitor Analysis Companies HouseCompanies House – check their accounts! Annual Reports Google Look at n/layer?=en&topicId= n/layer?=en&topicId=

Collaborators Who could you work with? Who could help you establish yourself in this market? How could you benefit? How could customers benefit?

Research process Decide what market you are in Agree the aim of your research How will you record and analyse it? – need to think it through as a team Carry out the research – MCCC Turn your research into intelligence Build your plans based on detailed market knowledge and understanding

Sources of secondary market information COBRA (the complete business reference adviser) is available through the Careers Service and will be an invaluable source of information for your business. Additional resources include: –Business Link: –Chamber of Commerce - business directories

Cobra – Practical Information Resource (available online in The Elevator) BIFs and BOPs: Business Information Fact Sheets Business Opportunity Profiles (market synposes) e.g. No 59. Questions to help you choose a business idea, No 47. A guide to sources of market and business information, No 4. a guide to writing a business plan, No 174. A summary of sources of finance for small firms, No 8. A guide to understanding profit and loss accounts, No 54. A guide to costing a product or service etc. etc.

Useful Web Sites – British Library (or – Chartered Institute of Marketing – market reports (previously cobweb information) – market reports – Market Research Soc. – consumer market reports – local population statistics - university facts and figures

Useful websites…continued – Northern Ireland statistics – Office for Nat. Statistics – market reports socio-economic information for local population – national statistics for social & regional trends – as above

Useful Resources Patents, Trademarks Newcastle City Library – Patents Advice Centre Rise Up Intelligence – via the Elevator

Market Research Needs to be an ongoing process Curiousity and questioning Listening Watching trends – STEEP analysis Markets, customers, competitors, collaborators all keep evolving Challenges and Opportunities

STEEP S – Social T – Technological E – Environmental E – Economic P – Political PESTLE (adds in Legal)

SWOT SWOT analysis – Strengths, Weaknesses, Opportunities, Threats useful analytical tool: eetemplate.htm#swot-analysis-matrix

XING A commercialisation and planning Tool 90 key decisions Familiarises you with the terminology of business planning and development An opportunity to work on your idea and consider how you would turn it into a business Consider your goals and how to achieve them

Business Structures TypeDescriptionAdvantagesDisadvantages Sole TraderSole owner, can employ others Easiest and cheapest to establish Owner personally responsible without limit for business losses. No income if ill/on holiday Price, A and Sarmiento, T, 2008

Business Structures TypeDescriptionAdvantagesDisadvantages PartnershipJoint ownership across partners Spreads risk, more attractive to investors, broader skill and knowledge base All partners are responsible for the actions of others, has cost implications Price, A and Sarmiento, T, 2008

Business Structures TypeDescriptionAdvantagesDisadvantages Limited Co (Ltd) Creates separate legal entity owned by shareholders, Company has a legal identity Clear structure for seeking funding, attractive to investors, limited liability for debts Higher set up costs, accounts are public and must be filed with Companies House Price, A and Sarmiento, T, 2008

Business Structures TypeDescriptionAdvantagesDisadvantages Limited Liability Partnership LLP Half way house between partnership and Ltd Co, mainly used for firms of professionals eg Consultants, solicitors Separate legal Identity, can own and hold property, employ people Liable for all its debts to full extent of assets Price, A and Sarmiento, T, 2008

Raising Finance YOU (£0-£10k) Seed Funds –Friends and Family (£0-£50k) –Grants and Competitions (£0-£50k) –Loans (£10k-£800k) Equity Finance –Angels (£20k-£500k) –Venture Capitalists (£1m-£20m----?) Initial Public Offering –Company shares traded on the stock market

Xing Idea in 10 words or less SMART Goal S? M? A? R? T?

XING Idea in 10 words or less SMART Goal Specific Measurable Acheivable Realistic Timed

Xing themes Strategy – Goals, structure, R&D, training, eventual exit Actions – practical actions – bank account, legal entity, business plan, IP Finance – how will you finance it? Marketing – market research, brand, understanding your market, pricing, segmentation, distribution People- wide range of skills needed

Rise Up – Careers Service, Kings Gate Elevator – market research and other resources General discussion for the competition: To take forward your business idea in the future: make appointment with Development Officer